PSU bank stocks edge lower

Stocks of public sector banks edged lower at 15:10 IST on BSE on reports Finance Minister Arun Jaitley met with heads of public sector banks on issues relating to rising non-performing assets in the sector.

Meanwhile, the S&P BSE Sensex was down 173.18 points or 0.55% at 31,088.88. The S&P BSE Bankex index declined 291.66 points or 1.09% at 26,528.62.

Among public sector banks, Union Bank of India (down 4.61%), Bank of Baroda (down 3.54%), Indian Bank (down 3.21%), Punjab National Bank (down 2.63%), IDBI Bank (down 2.26%), State Bank of India (down 1.18%) and Corporation Bank (down 0.68%) edged lower. Indian Overseas Bank (up 1.18%) edged higher.

The Finance Minister Arun Jaitley was quoted as saying that he discussed non-performing assets (NPA) resolution, finances of banks, review of financial inclusion with heads of public sector banks in a meeting today, 12 June 2017. Jaitley reportedly said that there is a challenge with regard to credit growth.

The S&P BSE Bankex index had underperformed the market over the past one month till 9 June 2017, advancing 3.83% compared with the Sensex's 4.44% rise. The index had, however, outperformed the market over the past one quarter, gaining 13.51% as against the Sensex's 8.06% rise. The index had also outperformed the market over the past one year, gaining 30.81% as against the Sensex's 16.81% rise.

Oriental Bank of Commerce (OBC) was down 4.6%. The bank said it has revised the marginal cost of funds based lending rate (MCLR) for different tenors with effect from 12 June 2017. The bank's MCLR for overnight loans will be 8.1%, the rate for one month will be 8.2% and for three months it will be 8.25%. The MCLR on 6-month loans will be 8.35% and for one-year loans the rate will be 8.5%, the bank said. The announcement was made after market hours on Friday, 9 June 2017.

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